Tenants By the Entirety: Overview

Historically, property jointly held by husband and wife as tenants by the entirety has not been subject to liens filed against only one spouse, provided the couple was married at the time of acquisition of the property and remained married to each other, continuously and uninterruptedly, throughout the date of the current conveyance or encumbrance. Tenancy by the entirety must meet all requirements (unities) of joint tenancy in addition to the fact that both parties must be married to each other. This special exempt status as to creditors of one spouse may be limited to the marital homestead property of the “innocent” spouse in some states. If, however, the couple divorces, such entirety estate would automatically convert to a tenancy in common and would remain so, even if the couple remarried each other. The only way in which an estate by the entireties could be re-established is if the now-remarried couple executes a deed to themselves as tenants by the entirety


Tenancy by the Entirety includes the right of survivorship. Upon the death of either spouse, the property automatically passes to the surviving spouse. 


Tenancy by the Entirety is not recognized in all states. Where it is recognized, typically, a conveyance having two people as “husband and wife” as grantee will automatically create a tenancy by the Entirety. In other states marital rights, homestead rights or statutory community property rights may apply. It is the opinion of the Internal Revenue Service regarding federal tax liens that separate but identical liens filed against a husband and wife individually will attach as a lien to jointly-held property including property held as an estate by the entirety. Therefore, such liens must be made an exception to title unless satisfied and released or subordinated as to the lien of the current/new mortgage. In the latter case, the lien would still be reflected as an exception to title on the owner’s and loan policies; however, it would be reflected as a subordinated interest on Schedule B, Part II of such loan policy. The Supreme Court of the United States has determined that federal tax law supersedes state law concerning tenancy by the Entirety and a federal tax lien against only one spouse/tenant will pierce the entireties shelter and attach to the property (U.S. v. Craft).